U.S. Manufacturing Sector Recovery Lagging

Even though the U.S. economy is showing strong signs of recovery, the U.S. manufacturing sector, hit harder by the current recession, may be slower to recover, predicted Dave Huether, the chief economist of the National Association of Manufacturers.

Staff

05/09/2002

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Even though the U.S. economy is showing strong signs of recovery, the U.S. manufacturing sector, hit harder by the current recession, may be slower to recover, predicted Dave Huether, the chief economist of the National Association of Manufacturers.

"Many of the factors that caused the recession have been corrected; however, slow growth overseas and an overvalued dollar will likely continue to be a thorn in the sides of manufacturers in 2002," said Huether.

The economist also pointed out that for the manufacturing industry, this recession has been somewhat more dramatic than the last recession in 1990-91 when the industry experienced a 5% percent output drop and job losses of less then one million, as compared to the current slowdown since mid-2000, where manufacturing output has fallen 7.5% and 1.6 million people have lost their jobs.

On a positive note, Huether indicated that inventories reached a 20-year low in November 2001.

"This is solid evidence that the inventory overhang is over, which means that firms will begin to respond to increased demand with increased production in 2002," he added.

For more information about Huether's comments, as reported by the market research firm FMI, visit www.fminet.com .